Benefits Of Holding And Trading Crypto Exchange Coins
Diversification of a portfolio with cryptocurrency-exchange coins that bring dividends, discounts, and airdrops.
More than 5000 cryptocurrencies are fighting for their piece of the pie. Crypto exchange coins or Exchange specific coins are primary utility tokens circulated in a cryptocurrency exchange’s ecosystem, providing users with unique discounts and lucrative benefits.
An exchange specific crypto coin is a cryptocurrency native to a cryptocurrency exchange platform. The exchange specific coins are deeply integrated into the exchange platform and thus have major utility.
Moreover, some crypto exchange coins offer rebates, dividends per token, and other benefits. Let's understand the benefits of holding and trading crypto exchanges coins. This post will dive deep into:
- Binance Coin - BNB
- KuCoin Shares - KCS
- Crypto.com Coin CRO
Binance Coin - BNB
Binance was launched in July 2017, and it took no time to become the largest cryptocurrency exchange in the world. It is still dominating the crypto exchange universe.
BNB is the cryptocurrency native to the Binance Exchange platform. You can gauge the popularity of BNB tokens by the fact that all the 100 million tokens in the ICO were sold out in just 20 days, amassing around $15 million. BNB has seen solid growth since its launch, and now it stands as the sixth-largest cryptocurrency by market capitalization.
A $500 investment in BNB tokens during its ICO is worth $153,550 as of the current price. This is an approximately 30610℅ ROI. However, Binance does not offer dividends.
Nevertheless, if you pay the trading fees using BNB tokens, you will enjoy a 25% discount straightaway. (The discount rate was 50% in the first year, and this rate is set to decrease by half every year). Moreover, the discount also changes depending on the trading volume and your tier level (based on the number of tokens you hold). Also, BNB has a hard-cap of 200 million, which coupled with its token burning process ensures a potential price increase with time.
The more you trade, the fewer is the fee you have to pay per each executed order. That is why some traders and portfolio managers prefer automated trading over manual because automated algorithms can trade non-stop with a higher frequency.
For example, at Bitsgap automated bots can place up to 200 limit orders within a set trading range. Below are examples of some of Bitsgap’s active bots on BTT/USDT, LEND/BTC, and BCH/USDT. You can spot that LEND/BTC Autobot has managed to execute 21458 traders for a period of 144 days. That is 149 trades per day on average (around 0.0016 BTC per each trade).
If we then multiply 149 trades by 30 days to get a total number of trades per month we will get 4470 trades. Multiply 4470 trade by the value for each trade 0.0016 BTC, that is 7.152 BTC volume traded per 30 days.
Apart from being a utility token, you can also use BNB to pay for your travel expenses, buy virtual gifts, shop using a credit card, take loans and earn interest. Moreover, in the future, you can pay gas fees on the Binance Chain and the Binance Decentralized Exchange using BNB tokens.
BNB has major utility in and outside the Binance ecosystem which makes it a valuable asset. Furthermore, with Binance's plans, the utility of BNB tokens will only increase as new products are being developed and so can its value.
KuCoin Shares - KCS
KuCoin is a centralized cryptocurrency exchange launched in October 2017. At the time of publication, KuCoin is the 9th largest cryptocurrency exchange in the world.
KuCoin Shares - KCS, is the custom ERC-20 token of the KuCoin platform. Similar to BNB, KCS has a total supply of 200 million tokens. Moreover, according to KuCoin’s whitepaper, it will burn 10% of their profit until there are only 100 million tokens left in circulation. This limited supply will potentially increase KCS's value over time if the demand remains stable or even rises.
KuCoin offers two major incentives to its holders:
- Firstly, KCS holders benefit from lower trading fees. For every 1000 KCS, users receive a 0.01% reduction in trading fees. Considering their standard trading rate of 0.1%, users can trade with negligible trading fees. The math is simple; the more KCS you hold, the lower your trading fees are.
- Secondly, KuCoin offers dividends to KCS holders. KuCoin offers a 50% overall trading fee for over 24 hours. As a result, the dividend per token is based on the volume of trades and fees on that day. Remember, the more the trading volume the more the incentive.
Had you invested $500 in KCS during its ICO, your investment would be approximately worth $2068 at the time of this writing. This translates to around 313.6% ROI.
Lower trading fees and dividend per token make this crypto coin competitive even among other utility coins.
Crypto.com Coin (CRO)
Crypto.com launched its exchange platform in September 2020 after its completed public beta program. Crypto.com offers payment via their metal VISA cards, seamless crypto transactions via their app, crypto exchange operations.
CRO is the native cryptocurrency of the Crypto.com platform. To ensure its value increases with time (if demand rises) it is hard-capped at 100 billion coins . Staking CRO provides several benefits. You will receive rebates when you pay trading fees in CRO whilst you get paid 10% APR interest.
Moreover, CRO token holders get a priority token allocation for fundraising events on their Syndicate platform, Crypto.com's native fundraising platform. Furthermore, retail users can earn up to 0.10% on taker fees by trading on the exchange. Additional rebates increase with the CRO stakes.
CRO is one of the hottest crypto investments, as it has utilities in all three spheres - trading, payment, and other financial services (DeFi, credit). At the time of writing, CRO stands as the 15th largest cryptocurrency in terms of market capitalization.
📊 ROI Comparison Chart
Let's now have a vintage look at the ROI of the above-listed crypto exchange coins as mentioned on CoinMarketCap. The ROI is the approximate gain from the time of launch or the earliest known price.
Wrapping Up
Like any other investment asset, cryptocurrencies are volatile too. Unfortunately, the fluctuations are much higher than any other investment, as is the potential for massive gains.
Nevertheless, to earn profits from a crypto coin investment, you have to bet on its utility while analyzing its token economics and price charts. In terms of utility, cryptocurrency exchanges have an upper hand, as no matter what, crypto trades will require exchanges.
Analyze the charts, read the utility, and enjoy profits. Happy trading!
Further readings:
- Automated trading strategies part 1 - discover pattern formations and optimal trading configurations for automated bots.
- Automated trading strategies part 2 - additional pattern formations and trading configurations for SBot and Classic bot.
- Order flow as support and resistance - a useful instrument for your technical analysis to point out key price levels on a chart for any cryptocurrency.
Written by Dmitry Perepelkin
